Since the economy's been going down the septic system in your uncle Gary's back yard over the past few months, I decided to look into the idea of starting up my own currency. Why not? Ours is worthless anyway. Turns out hundreds of communities also decided to economically secede from the Union, and most of them got their start from a book called Hometown Money, written by Paul Glover. Interested in freeing yourself from the shackles of the dollar? Come along with me…
So Paul Glover started a community currency during the recession of 1991 in Ithaca, NY, called the Ithaca HOURS. Basically, he got together with a few of his anarchist buddies over a pot-luck hoedown and decided that people should be paid in wages based on time instead of volatile dollars, and surprisingly enough, shortly after the first bill was printed the idea quickly caught on.
When it reached its peak in 1996, you could use the HOURS (one hour is equivalent to around $10) to purchase nearly anything in Ithaca. You could pay your divorce lawyer with HOURS, fill up your tank, get a back massage, or even score some beers. It especially helped out lower income families who were using food stamps to feed the kids. The HOURS were doled out as supplemental income for the people who needed it most, and in a few cases, people could even take out interest free loans for up to 3,000 HOURS.
Paul says that the HOURS are the difference between playing the game of Monopoly and creating the reality of anti-Monopoly, and that US currency is backed by a trillion dollar debt, which is less than nothing—but the HOURS are backed by labor and trade, the real tangible things that people can count on.
It sounds logical enough to me, but how can any of this be legal? I mean, it seems like whole US cities not using American dollars for currency would make Ben Bernanke's pubes curl up in a rage of fury. With this in mind and in the hopes of figuring out how I can create my own banana republic, I got Paul on the phone and asked him a few questions.
Vice: So how can it be legal to print your own currency?
Paul Glover: Members of the media have asked me that question before. They contacted the Treasury Dept., the IRS, the FBI, the Secret Service, and the Federal Reserve—and none of them could find a law against printing HOURS. The specific legal prohibition in the Constitution (Article 1 Section 8) says that no arm of government but the federal government may issue bills of credit. So curiously, a state or local government may not issue a local currency, but you or I or anybody we know can print and issue money, and if people agree to take it then that's all right. In many countries you cannot do anything unless it is specifically permitted, and in the United States, you can do anything unless it is specifically prohibited. And because they didn't make a law prohibiting the issuance of local currency by non-governmental entities, we are doing it.
This seems like an economic secession. How can the use of Ithaca HOURS affect American Dollars?
The strength of a national currency depends of the vitality of local economies. I've been coughing a lot so I'll use that as an example. So if our alveoli—the tiniest air sacks in our lungs are infected—then the large lobes of the lungs are coughing, the tiniest elements of which a large entity consists need to be healthy. And if we have trampled local economies and sucked the life out of them, then we've knocked the wind out of our economy. So if you have hundreds, even thousands, of local currencies properly managed, it could strengthen the national currency.
I read that China interested in the HOURS system. What's going on with that?
It's a matter of control. Dollars are a game, controlled by the biggest banks and speculators who drive the value up and knock the value down, who ram gigantic amounts of it into an economy and then pull it out. You may recall the tiger economies of Southeast Asia; all the sudden companies were throwing billions of dollars into Southeast Asia because of cheap labor and resources. After a while, everybody's rich—a giant middle class—then an investor said, "Hey there's a better deal over here," and go over there they did. There were food riots in Indonesia and the prices of everything went up-up-up. That's why the Chinese contacted me. They were about to join the WTO and hook their economy to the destiny of the American Dollar. They were very concerned they said and they were looking for a measure that was capable of becoming independent of the world monetary system.
Thanks Paul, you're the most organized anarchist on the planet.